Singapore Market Outlook 2018, by CBRE
Supported by the strong rebound in the manufacturing sector and a synchronised recovery in global economies, Singapore’s annual GDP growth of 3.6% in 2017 surpassed initial estimates. While growth is expected to moderate in 2018, the continued focus on digitisation and transformation of Singapore’s key industries will help pave the way for more sustainable growth in the longer term
The Singapore economy has shown stronger growth momentum in the latter half of 2017. While this has been largely powered by the manufacturing sector, the services sectors have shown promising signs of life. This is expected to underpin demand amidst a supply pipeline that is tapering off. With these stronger market fundamentals, a robust office rental recovery looks set to be underway in 2018.
The downward pressure on the retail market could be coming to an end, as it finds its footing amidst stronger economic fundamentals. Placemaking will remain a key focus for landlords and retailers as they seek to play a more proactive role to keep their customers engaged.
Warehouse supply hit a record level in 2017 as most major logistics developments were completed. Net absorption lagged supply, which weighed on occupancy. Along with the robust growth in macroeconomic industrial indicators in 2017, the industrial market is beginning to rebalance as net absorption slowly catches up with the net supply.
Total housing demand in 2017 was 25,010, far exceeding the previous three-year (2014-2016) average demand of 14,447 units. Overall homes prices have risen for two consecutive quarters to recover by 1.1% for 2017 after falling by 13.2% through 15 quarters of decline. As home prices turn around, fundamental demand now stands at around 18,500 units.
The recovery in the occupier market influenced a strong drive in Singapore’s investment market in 2017. After a busy year driven by the wave of residential collective sales and several large commercial deals, it is back to normalisation for the investment market in 2018.